Andorra
Retail_Trading_Status
- Analysis ID
- #586
- Version
- Latest
- Created
- 2025-12-12 02:55
- Run
- d98d3162...
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- Workflow Stage
- Step 1
Executive Summary
Cryptocurrency trading is legal and actively regulated in Andorra under the Digital Assets Act (Law 24/2022). The Andorran Financial Authority (AFA) oversees the sector and has issued licenses to major local financial institutions, including MoraBanc and Crèdit Andorrà, to provide custody and trading services. Retail investors can legally buy, sell, and hold digital assets, subject to Anti-Money Laundering (AML) compliance and a 10% capital gains tax on profits exceeding €3,000.
Key Pillars
Andorran Financial Authority (AFA) as the primary regulator for digital asset service providers
Mandatory registration for all Virtual Asset Service Providers (VASPs) including issuers, custodians, and exchanges
Requirement to appoint a 'Digital Overseer' (Veedor Digital) to audit and supervise projects
Strict AML/CFT compliance under Law 10/2021, aligning with FATF standards
Distinction between 'Sovereign Digital Money' (CBDCs) and broader 'Digital Assets' (cryptocurrencies)
Landmark Laws
Law 24/2022 on Digital Assets (Llei 24/2022) - Enacted: 2022-06-30
- Comprehensive framework regulating the issuance, custody, and trading of digital assets. Defines categories of assets (sovereign vs. tokens), establishes the 'Digital Overseer' role, and mandates AFA authorization for service providers.
- Source
Decree 478/2022 (Decret 478/2022) - Enacted: 2022-11-30
- Regulations developing the role of the Digital Overseer, establishing suitability requirements and oversight obligations for issuers and platforms.
Law 10/2021 on Prevention of Money Laundering (Llei 10/2021) - Enacted: 2021-04-29
- Amended previous AML laws to explicitly include Virtual Asset Service Providers (VASPs) as obligated entities subject to UIFAND supervision.
Considerations
Capital gains from crypto are taxed at a flat rate of 10% (Personal Income Tax), with the first €3,000 of profit exempt.
Cryptocurrencies are not legal tender; only the Euro is legal tender in Andorra.
Local banks (e.g., MoraBanc) offer integrated crypto custody and trading services, easing fiat on/off ramp friction.
Service providers must maintain a physical presence and management in Andorra to be licensed.
The 'Digital Overseer' requirement adds a unique layer of compliance cost and oversight compared to other jurisdictions.
Notes
Andorra's approach is notable for its 'bank-led' adoption, where traditional banks are the first to offer regulated crypto services, contrasting with other markets dominated by standalone crypto exchanges. The country uses the Euro but is not in the EU, allowing it some regulatory flexibility while still adhering to strict European AML standards.
Remaining Uncertainties
- The exact number of international (non-bank) exchanges that have successfully obtained a license remains small compared to local banks.
- Specifics on how the 'Digital Overseer' interacts with foreign DeFi protocols are not fully tested in court.
Detailed Explanation
Detailed Explanation
Cryptocurrency trading is legal and actively regulated in Andorra. The country's comprehensive regulatory framework is anchored by the Digital Assets Act, Law 24/2022, enacted on June 30, 2022, which provides a legal foundation for the issuance, custody, and trading of digital assets. The Andorran Financial Authority (AFA) serves as the primary regulator, overseeing the sector and issuing licenses to Virtual Asset Service Providers (VASPs), which include issuers, custodians, and exchanges. A distinctive feature of Andorran regulation is the mandatory appointment of a 'Digital Overseer' (Veedor Digital) to audit and supervise projects, a requirement further detailed in Decree 478/2022 from November 30, 2022. All VASPs must register with the AFA and maintain a physical presence and management within the country to be licensed. Furthermore, these entities are explicitly included as obligated entities under the country's Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) framework, Law 10/2021 from April 29, 2021, which aligns with Financial Action Task Force (FATF) standards and is supervised by the Andorran Financial Intelligence Unit (UIFAND). The regulatory approach distinguishes between 'Sovereign Digital Money', such as central bank digital currencies (CBDCs), and broader 'Digital Assets', which encompass cryptocurrencies. For retail investors, activities such as buying, selling, and holding digital assets are permitted, but profits from capital gains are subject to a 10% tax under Personal Income Tax rules, with an exemption for the first €3,000 of profit. It is important to note that while cryptocurrencies are regulated, they are not legal tender in Andorra; only the Euro holds that status. The Andorran model is characterized by a 'bank-led' adoption strategy, where established local financial institutions like MoraBanc and Crèdit Andorrà have been among the first to receive licenses to provide integrated custody and trading services, thereby reducing friction for fiat currency on-ramps and off-ramps. This integration of traditional finance with the digital asset sector, coupled with the unique Digital Overseer requirement, represents a structured and supervised environment for cryptocurrency activities, albeit one that imposes specific compliance costs and operational obligations on service providers.
Summary Points
Andorra Cryptocurrency Regulatory Analysis
I. Regulatory Status
- Cryptocurrency trading is Allowed-Regulated.
- It is legal and operates under a comprehensive, active regulatory framework.
- The legal status is defined by Law 24/2022 on Digital Assets.
II. Key Regulatory Bodies
- Andorran Financial Authority (AFA): The primary regulator overseeing digital asset service providers, responsible for authorization and licensing.
- Digital Overseer (Veedor Digital): A mandated role for auditing and supervising projects, as per Decree 478/2022.
- Andorran Financial Intelligence Unit (UIFAND): Supervises AML/CFT compliance for Virtual Asset Service Providers (VASPs) under Law 10/2021.
III. Important Legislation
- Law 24/2022 on Digital Assets (Llei 24/2022): Enacted on 2022-06-30. This is the cornerstone legislation providing a comprehensive framework for digital assets. It defines asset categories (sovereign vs. tokens), establishes the Digital Overseer role, and mandates AFA authorization for service providers.
- Decree 478/2022 (Decret 478/2022): Enacted on 2022-11-30. This regulation develops the role of the Digital Overseer, establishing suitability requirements and oversight obligations.
- Law 10/2021 on Prevention of Money Laundering (Llei 10/2021): Enacted on 2021-04-29. Amends previous AML laws to explicitly include VASPs as obligated entities subject to supervision.
IV. Compliance Requirements
- Mandatory Registration: All Virtual Asset Service Providers (VASPs), including issuers, custodians, and exchanges, must register with the AFA.
- Digital Overseer Appointment: Issuers and platforms are required to appoint a Digital Overseer to audit and supervise their projects.
- AML/CFT Compliance: Strict adherence to Anti-Money Laundering and Counter-Financing of Terrorism rules under Law 10/2021, aligning with FATF standards.
- Physical Presence: Service providers must maintain a physical presence and management in Andorra to be licensed.
- Tax Compliance: Capital gains from cryptocurrency are taxed at a flat rate of 10% under Personal Income Tax, with the first €3,000 of profit exempt.
V. Notable Restrictions or Limitations
- Cryptocurrencies are not legal tender; only the Euro is legal tender in Andorra.
- The requirement for a physical presence and management in the country limits the ability for fully remote or foreign-based entities to operate.
- The 'Digital Overseer' requirement adds a unique layer of compliance cost and oversight.
VI. Recent Developments or Notes
- Andorra's approach is notable for its 'bank-led' adoption, where traditional banks like MoraBanc and Crèdit Andorrà are the first to offer regulated custody and trading services, easing fiat on/off-ramp friction.
- The country uses the Euro but is not an EU member, allowing regulatory flexibility while adhering to strict European AML standards.
- The framework distinguishes between 'Sovereign Digital Money' (CBDCs) and broader 'Digital Assets' (cryptocurrencies).
Full Analysis Report
Full Analysis Report
Andorra has established itself as a fully regulated jurisdiction for cryptocurrency through the enactment and active implementation of Law 24/2022 on Digital Assets. Unlike many jurisdictions that merely tolerate crypto or rely on generic AML laws, Andorra created a bespoke legal framework that covers the entire lifecycle of digital assets, from issuance to custody and trading. The Andorran Financial Authority (AFA) serves as the primary regulator, enforcing strict licensing requirements that have successfully brought major local financial players into the ecosystem.
As of late 2025, the regulatory regime is fully operational. Prominent Andorran banks, specifically MoraBanc and Crèdit Andorrà, have received authorization to offer digital asset services. MoraBanc, for instance, launched a digital asset custody wallet and trading service for clients in early 2024, marking a significant milestone in the integration of traditional banking with the crypto economy. This integration provides retail investors with secure, regulated channels to access the market, mitigating the banking blockade issues often seen in other regions.
The legal framework introduces a unique figure known as the 'Digital Overseer' (Veedor Digital), an independent third party responsible for auditing and supervising digital asset projects to ensure they comply with the law. This adds a layer of consumer protection and credibility but also increases the operational burden for potential entrants. Additionally, all Virtual Asset Service Providers (VASPs) must comply with Law 10/2021 regarding money laundering prevention, reporting directly to the Financial Intelligence Unit (UIFAND).
Taxation is favorable compared to neighboring jurisdictions like Spain or France. Crypto trading profits are treated as capital gains under the Personal Income Tax (IRPF) regime, taxed at a maximum of 10%. A significant exemption applies to the first €3,000 of financial income, and there is no wealth tax on crypto holdings. This fiscal environment, combined with the legal certainty provided by the AFA's licensing regime, solidifies Andorra's status as an 'Allowed-Regulated' jurisdiction for retail crypto trading.
Andorra has established itself as a fully regulated jurisdiction for cryptocurrency through the enactment and active implementation of Law 24/2022 on Digital Assets. Unlike many jurisdictions that merely tolerate crypto or rely on generic AML laws, Andorra created a bespoke legal framework that covers the entire lifecycle of digital assets, from issuance to custody and trading. The Andorran Financial Authority (AFA) serves as the primary regulator, enforcing strict licensing requirements that have successfully brought major local financial players into the ecosystem. As of late 2025, the regulatory regime is fully operational. Prominent Andorran banks, specifically MoraBanc and Crèdit Andorrà, have received authorization to offer digital asset services. MoraBanc, for instance, launched a digital asset custody wallet and trading service for clients in early 2024, marking a significant milestone in the integration of traditional banking with the crypto economy. This integration provides retail investors with secure, regulated channels to access the market, mitigating the banking blockade issues often seen in other regions. The legal framework introduces a unique figure known as the 'Digital Overseer' (Veedor Digital), an independent third party responsible for auditing and supervising digital asset projects to ensure they comply with the law. This adds a layer of consumer protection and credibility but also increases the operational burden for potential entrants. Additionally, all Virtual Asset Service Providers (VASPs) must comply with Law 10/2021 regarding money laundering prevention, reporting directly to the Financial Intelligence Unit (UIFAND). Taxation is favorable compared to neighboring jurisdictions like Spain or France. Crypto trading profits are treated as capital gains under the Personal Income Tax (IRPF) regime, taxed at a maximum of 10%. A significant exemption applies to the first €3,000 of financial income, and there is no wealth tax on crypto holdings. This fiscal environment, combined with the legal certainty provided by the AFA's licensing regime, solidifies Andorra's status as an 'Allowed-Regulated' jurisdiction for retail crypto trading.
Source Evidence
Primary and secondary sources cited in this analysis
"In early 2024, MoraBanc became the first bank in Andorra to receive authorisation to custody and provide access to digital asset markets to its clients."
"3 virtual assets service providers (VASPs) are currently supervised by the Andorran Financial Authority (AFA)."
"Establish rules for the use of digital assets and blockchain technology... regulating the digital representation of assets."
"The maximum rate of personal income tax for residents is 10%. ... The first €3,000 per year that you declare as profits... will be tax-free."
Web Sources (2)
Sources discovered via web search grounding
Search queries used (8)
- Andorra crypto tax capital gains
- Andorra Law 24/2022 on Digital Assets summary
- is cryptocurrency legal in Andorra 2024
- Andorra cryptocurrency regulation AFA retail trading
- Andorra VASP license register
- MoraBanc digital assets custody license Andorra
- Andorran Financial Authority public register virtual asset service providers
- list of authorized digital asset service providers Andorra
https://metlabs.io/en/regulation-blockchain-andorra/
https://andorralawyers.com/andorra/andorra-digital-assets-law/